#Electric car premiums? Rest insured, they’re on it…

Ever wondered how electric vehicle insurance premiums are set? So have we.

Apparently it’s not all that different from how they are set for normal petrol and diesel cars. Thatcham – or the Motor Insurance Repair Research Centre to give it its full title – provides 70% of the data that insurance companies (which also fund the not-for profit organisation) use to score a vehicle’s insurance risk. The main criteria include:

Performance (0–60 mph time for petrol cars, and torque for diesel and electric vehicles) and power-to-weight ratio;

top speed;

repair times;

cost of repair;

new car price; and

vehicle weight.

Added together, these make up the overall ‘insurance group rating’ (IGR), although the final rating may change to take account of specific vehicle characteristics. IGRs are merely guidelines and insurance companies are free to set their own rate for each vehicle. At the end of the process a vehicle will fall into one of 50 insurance groups.

In the case of electric vehicles, account is taken of uncertainties surrounding the battery technology. A small risk factor is applied to take into account difficulties with salvaging the batteries and simply because of the inexperience with the technology.

To give some examples: the Vauxhall Ampera falls into group 21, as does the Nissan LEAF (which initially fell into group 28 because it didn’t have an alarm system).

One interesting issue with electric vehicles is the risk of electrical faults in the home and, in the worst case scenario, your house burning down. This is covered by home insurance, not vehicle insurance. When thinking about insuring their electric vehicle, potential buyers (or indeed current owners) should therefore look at the ‘total cost of insurance’.